Power and Authority of Agents

Question 1

Power to Bind

Answer 1

When an agent acts within the scope of their authorized powers, the agent has the power to bind the principal to contracts entered into on the principal’s behalf

Question 2

Actual Authority from Principal

Answer 2

Can be either express or implied.

Question 3

Express Authority

Answer 3

The authority of the agent to do those things that the principal has – in an oral or written communication – directly authorized the agent to do.

Question 4

Equal Dignity Rule

Answer 4

Holds that if a K must be in writing, the grant of authority to an agent to enter into such K on behalf of the principal must also be in writing.

Question 5

Implied Authority

Answer 5

The authority of the agent to do:

• anything necessary to accomplish the principal’s express request of the agent; or
• those things the agent believes the principal wishes the agent to do based on the agent’s reasonable understanding of the principal’s expressed request

Question 6

Apparent Authority

Answer 6

• When a third party is led to believe by principal that the agent is acting with the principal’s authority.
• A principal is accountable for the result of third-party beliefs about an actor’s authority to act as an agent when the belief is reasonable and is traceable to a manifestation of the principal.

Question 7

Apparent Authority: Manifestation of the Principal

Answer 7

A principal’s manifestation can be accomplished by words, conduct, or failure to act (e.g. failure to notify customers of the termination of an agent’s actual authority).